Tuesday archive: Cheap Tricks

The Labour party is accused of taking loans of £4.5m and rewarding lenders with life peerages. In the US, where everything is bigger, lobbyists spend at least that per congressman; annual spending is more than $2bn a year. Only an economist, then, would ask why there is so little money in politics.

We have seen countless hand-wringing books arguing that democracy is for sale, and, given the plentiful supply of scandal, this is easy to believe. But something doesn’t add up. Assume for a moment that the most pessimistic hand-wringers are right and the government really is for sale. How much would you pay for it? In the UK, government spending is nearly half a trillion pounds a year. If anything, this is an underestimate of how much it would be worth to control the government, since if I was an industrialist with the government in my pocket, I could order that foreigners be fended off with tariffs, and domestic competitors be bound fast with red tape.